Has the next round of tax relief/stimulus been signed into law?
Yes, the Consolidated Appropriations Act, 2021 was signed into law on Sunday, December 27th, 2020
Is there another round of PPP loans?
Yes, PPP Second Draw is available for eligible businesses that received a PPP loan in the first round of stimulus.
What business are eligible for a PPP second draw loan?
When banks are ready to accept applications for a PPP Second Draw loan, businesses that qualify:
- Were in operation on or before February 15, 2020
- Have 300 or fewer employees per location (this is a headcount)
- Have used all the PPP funds received in the first round or will use all the PPP funds received in the first round
- Have at least a 25% reduction in gross receipts in any quarter in 2020 when compared to the same quarter in 2019
What if my business was in operation beginning Q3 of 2019?
The calculation of a 25% gross receipts reduction can be completed using Q3 or Q4 data in 2020 and compare to the same quarter in 2019.
What if my business was in operation beginning Q4 of 2019?
The calculation of a 25% gross receipts reduction can be completed using Q4 data in 2020 and compare to Q4 in 2019.
What if my business was not in operation during any part of 2019 but was in operation on February 15, 2020?
The calculation of a 25% gross receipts reduction can be completed by comparing Q2, Q3, and Q4 gross receipts independently to Q1 gross receipts.
How is the amount of the PPP second draw loan calculated?
For restaurants only, the amount of PPP Second Draw that a borrower can request is 3.5 times the average monthly payroll expense calculated using 2019 payroll expenses or the payroll expenses over the 12-month period prior to applying for a PPP Second Draw loan.
Will RASI be able to supply me a report to average my payroll expenses over a period of 12-months?
Are there any additional non-payroll expenses eligible for forgiveness?
- Property damage from vandalism or looting due to public disturbances that occurred in 2020 (not covered by insurance)
- Covered supplier costs, which include the purchase of goods and perishable goods that are essential to the operations of the entity
- Personal Protection Equipment
- Worker protection expenditures to facilitate the adaption of the business activities to comply with federal/state/local COVID-19 safety requirements, g., a drive-through window, air pressure ventilation or filtration system, a physical barrier such as a sneeze guard, outdoor tents/structure for dining
- Software or cloud computing services that facilitate business operations
- Product or service delivery
- Tracking of supplies, inventory, records, and expenses
Will RASI be creating GLs to track the above expenses?
Yes, RASI will create GLs for the categories listed above for all clients, there is no need to request the creation of the GLs.
Did the new law make any changes to the type of employer-incurred insurance payments that qualify as payroll costs and are eligible for forgiveness?
Yes, group life, disability, vision and dental insurance (this is retroactive to the effective date of the CARES Act).
Are $10,000 EIDL grants available during the second round of PPP loans?
Yes, but there are many restrictions; speaking with your lender is the best avenue to determine eligibility.
Do the $10,000 EIDL grants still reduce the amount of PPP forgiveness?
No, the $10,000 EIDL grant no longer reduces the amount of PPP forgiveness (this is retroactive to the effective date of the CARES Act).
What if I have received forgiveness but my $10,000 EIDL grant reduced the forgiveness amount?
Speak with your lender about the balance of your PPP loan being paid back due to the EIDL grant; the law that required the reduction of PPP forgiveness due to an EIDL grant was rescinded and retroactive to the effective date of the CARES Act.
Is there a simplified forgiveness form?
Yes, the SBA will develop a one-page forgiveness application for loans of $150,000 or less.
Are expenses paid with forgiven PPP funds deductible on year-end tax returns (1040, 1065, 1120, 1120-S)?
Yes, this change is retroactive to the effective date of the CARES Act.